BT union campaigns for higher pensions

Click to follow
The Independent Online
UNIONS at BT are threatening to block a planned merger of the telecommunication company's two pension funds unless they are promised higher benefits.

The National Communications Union, one of a number of unions at BT, has submitted a claim for improvements to the pension scheme. A spokeswoman said agreement was its price for supporting the merger.

Four out of nine of the trustees in each scheme are appointed by the unions, who also have a say in the appointment of the chairman, giving them strong influence over changes to the schemes.

The NCU wants pensions to be calculated on the basis of one-sixtieth of pensionable salary for every year of service rather than one-eightieth. This means that someone who had worked for BT for 20 years with a pensionable salary of pounds 20,000 would see a rise in pension from pounds 5,000 to pounds 6,600 a year.

The cost of this exercise would be substantial even for BT's schemes, which have a combined market value of pounds 12.3bn.

Plans for a merger were disclosed in accounts for the two schemes released last week. Sir Douglas Morpeth, the outgoing chairman of both boards of trustees, said the merger was subject to a valuation of the schemes' assets due in the autumn. The merger was likely to go ahead in January 1993.

He said the Staff Superannuation Scheme would soon have to sell assets to meet liabilities unless there was a merger, while the New Pension Scheme would otherwise have to buy investments to meet long-term liabilities.

Sir Douglas also assured members of both schemes that each has safeguards against fraud. He said 'the Maxwell situation could not have occurred'.

Most of the funds are managed by Postel, which also runs the Post Office pension fund, and are designed to reflect the performance of the stock market as a whole. Mercury Asset Management manages pounds 790m with a brief to outperform the market, although it lagged last year.

Comments